Bar Takes 1st Action After Murray Scandal

Protection Fund For Clients Doubled

RICHMOND — The Virginia State Bar has adopted its first reform in the wake of the David Murray Sr. scandal, doubling the size of a fund it created to compensate clients ripped off by crooked lawyers.

The bar's executive committee voted unanimously on Friday to forgive $600,000 in loans the agency previously made to its Clients' Protection Fund. That bit of dollar-shuffling means the fund's net worth will jump from about $550,000 to nearly $1.2 million.

It also means there will be twice as much money available to repair the damage should another Murray come down the pike. Murray, a Newport News lawyer, made history and headlines by stealing about $42 million before killing himself in February 1992. Because of various fund restrictions, the bar paid less than $60,000 to law clients that Murray fleeced.

The bar has come under intense criticism for failing to thwart Murray before the millions were gone and for having too little money to help his victims afterward. The state agency has been considering all manner of reform proposals, but doubling the fund was its first action that moved beyond the study stage.

"I think it's the most positive thing we could do at this point, and I think we could get some good press for this," said James R. McKenry, an executive committee member from Virginia Beach.

Said Thomas A. Edmonds, the bar's executive director: "This would put the fund in a better position if and when we have another one of those serial killers."

The bar's president, William R. Rakes, lobbied hard for the measure, saying the state agency needed to take some action while continuing to look at other proposals.

"It seems to me that to say, `Hey, let's just throw $600,000 out there in hopes the public will love us,' is a very foolish thing to do," said Crowther, a Palmyra attorney.

The bar, the agency responsible for disciplining lawyers in Virginia, earlier launched an investigation of lawyers named in a Daily Press series, "See No Evil," which reported that several attorneys knew of wrongdoing by Murray but didn't report him.

Bar officials said Friday they have determined that none of those lawyers violated the state's whistleblower rule, which requires attorneys to report misconduct by colleagues.

However, the agency is still investigating Sa'ad El-Amin, a Richmond attorney named in the series. Representing a Hampton couple allegedly defrauded by Murray, El-Amin won a $1.5 million settlement after sending Murray a letter threatening to turn him in to the bar.

The state's code of professional responsibility prohibits attorneys from threatening a colleague with disciplinary action to gain an advantage in settlement negotiations.

A number of reforms are making their way through various bar committees, including one proposal calling for random audits of lawyer trust accounts. Waller Horsley, chairman of a bar committee especially created to study Murray reforms, told the council it's time to adopt the measure, which has been rejected by the bar several times before.

"The fact of the matter is, we are not as trusted as we formerly were," said Horsley, who has previously spoken against the measure.

Horsley estimated that the program would cost about $200,000 annually. "We feel the random audit will help manage our risk," Horsley said. The proposal hasn't been fine-tuned to the point where it's ready for consideration by the council, he said.

Because the bar may have to increase its dues to pay for proposals under consideration, the General Assembly voted overwhelmingly during this year's session to raise the dues ceiling from $200 to $300. The bar's annual dues are $185, and any increase will require the approval of the bar council and the Supreme Court of Virginia.

About a dozen protesters marched outside the bar's offices Friday, the second time the group of Murray victims has taken its calls for reform to the sidewalks of the state capital.

The protesters also marched briefly outside the Jefferson Hotel, where the bar's executive committee and council met. The council, which meets three times a year, will reconvene today.

One protester, Al Hauser, was less than enthusiastic when told about the bar's decision to double the size of its client protection fund. "That's just shutting the gate after the horse has gotten out, as far as I'm concerned," Hauser said.

Some Murray victims, Hauser among them, have filed papers with the state providing notice that they intend to sue the bar and other state agencies.

* Virginia State Bar increases size of fund to compensate clients ripped off by lawyers.

* This marks first action in wake of Murray scandal beyond the study stage. A number of reforms are making their way through various bar committees.

* Bar finds no lawyers named in Daily Press series violated the state's whistleblower rule.